ODYY 8-K
Odyssey Health, Inc. (ODYY)
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported):
(Exact name of small business issuer as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer ID No.) |
| (Address of principal executive offices) | (Zip Code) |
(
(Issuer’s Telephone Number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| N/A | N/A | N/A |
Securities registered pursuant to Section 12(g) of the Act:
| Title of each Class | Trading Symbol | Name of Each Exchange on Which Registered |
| OTC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b2 of the Securities Exchange Act of 1934 (§240.12b2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
On August 15, 2023, Odyssey Health, Inc., f/k/a Odyssey Group International, Inc. (the “Company”) entered into a Note Purchase Agreement (the “NPA”) with two accredited investors. The NPA is attached hereto and incorporated herein as set forth in Exhibit 10.1.
Upon the terms and conditions stated in the NPA, the accredited investors desire to purchase and the Company desires to issue and sell, as set forth in the NPA (i) a Convertible Promissory Note of the Company, (the “Note”), in aggregate principal amount of five hundred thousand ($500,000), (the “Loan Amount”), (ii) due and payable in full on or after the later of twelve (12) months from execution or completion of a Senior Exchange Listing of the Company or a Company Spinout (“Spinco”) of its ONP Technology, (iii) interest shall accrue at a rate of 12% per annum, (iv) is convertible at the lender’s option into shares of the Company’s Spinco Common Stock at a price that is seventy percent (70%) of Spinco’s IPO price, and (iv) a Common Stock Purchase Warrant (a “Warrant” and collectively, the “Warrants”) which Warrant will permit each investor to acquire a number of shares of common stock of Spinco equal to two hundred percent (200%) of such investor’s original face amount of the loan divided by the IPO price of the Spinco.
The form of NPA, Note and proposed Warrant are attached as Exhibit 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The descriptions of the NPA, Note and Warrant contained herein are summaries and are qualified in their entirety by reference to the form of NPA.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
| Number | Exhibit |
| 10.1 | Form of Note Purchase Agreement |
| 10.2 | Form of Convertible Promissory Note |
| 10.3 | Form of Spinco Common Stock Purchase Warrant |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Odyssey Health, Inc. | ||
| Date: August 18, 2023 | By: | /s/ Joseph Michael Redmond |
| Joseph Michael Redmond Chief Executive Officer | ||
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EXHIBIT 10.1
NOTE PURCHASE AGREEMENT
NEITHER THE CONVERTIBLE SUBORDINATED NOTE (THE “NOTE”) NOR THE SHARES OF COMMON STOCK INTO WHICH THE PRINCIPAL AND INTEREST SHALL BE CONVERTED THEREUNDER (THE “CONVERSION SHARES”), BOTH OF WHICH ARE REFERRED TO HEREIN, HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR UNDER ANY STATE SECURITIES (“BLUE SKY”) LAWS. THE SECURITIES ARE BEING OFFERED AND SOLD UNDER THE EXEMPTION PROVIDED BY SECTION 4(2) OF THE 1933 ACT, AND/OR PURSUANT TO RULE 505 OR 506 PROMULGATED THEREUNDER. A PURCHASER OF THE SECURITIES OFFERED HEREIN MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT, AND THEREFORE CANNOT BE SOLD UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT. THE COMPANY HAS NO OBLIGATION TO REGISTER THE SECURITIES UNDER THE 1933 ACT.
This NOTE PURCHASE AGREEMENT (“Agreement”) is made this ____ day of August 2023 by and between Odyssey Health, Inc. f/k/a Odyssey Group International, Inc., a Nevada corporation (the "Company"), and the undersigned purchaser ("Purchaser").
In consideration of the mutual covenants and representations herein set forth, the Company and Purchaser agree as follows:
| 1. | Purchase and Sale of Securities. |
a. The Convertible Note. Subject to the terms and conditions of (i) this Agreement, (ii) the note, in substantially the form attached hereto as Exhibit A (the “Note”), the terms of which are incorporated herein by reference, (iii) and compliance with applicable federal and state securities laws, the Company hereby agrees to sell to Purchaser and Purchaser agrees to purchase from the Company convertible securities for the face amount of ____________ ($_________), (with respect to each investor, the “Loan Amount”) which shall be convertible into shares of the Company’s $0.001 par value common stock (the “Stock”) as set forth in Paragraph 2 of the Note.
b. Issuance of Warrants. As additional consideration for the Purchasers to participate in the financing, each Purchaser also will receive from the Company a Common Stock Purchase Warrant in substantially the form attached hereto as Exhibit B (each, a “Warrant”, and, collectively, the “Warrants”), which Warrant will permit each investor to acquire a number of shares of common stock of the Company Spinout (“Spinco”) equal to two hundred percent (200%) of such investor’s original face amount of the loan divided by the IPO price of the Spinco. This Spinco warrant will be a cash-only warrant for exercise. This Spinco warrant will issue on the date of the setting of the price of the IPO of the Spinco. Each Purchaser hereby agrees and covenants that it shall be bound by the terms of the Warrant delivered to such Purchaser, including, without limitation, the requirement to become a party to the Company’s then current Lock up Leak out Agreement required by an underwriter, regardless of such agreement’s title, as a condition to the Purchaser’s exercise of the Warrant.
c. The Company and the Purchasers, having adverse interests and as a result of arm’s length bargaining, agree that: (i) neither the Purchaser nor any affiliated company has rendered any services to the Company in connection with this Agreement; (ii) the Warrants are not being issued as compensation; and (iii) all tax returns and other information of each party relative to this Agreement and the Notes and Warrants issued pursuant hereto shall consistently reflect the matters agreed to in (i) and (ii) above.
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| 2. | The Closing |
a. Closing Date. The first closing of the purchase and sale of the Notes and Warrants (the “First Closing”) shall be held on or before August __, 2023, or at such other time as the Company may determine in its sole discretion. (the “Closing”).
b. Purchaser’s Delivery. At or before any Closing, a Purchaser that is acquiring a Note and Warrant at such Closing, must deliver to the Company:
i. a counterpart signature page of this Agreement, duly executed by such Purchaser;
ii. a completed Purchaser Questionnaire in substantially the form attached hereto as Exhibit C, duly executed by such Purchaser;
iii. a cashier’s check or wire of immediately available funds in the amount of such Purchaser’s Loan Amount; and
c. Borrower’s Delivery. At or promptly following a Closing, the Company shall deliver to each Purchaser that is acquiring a Note and Warrant at such Closing, the following in consideration for the Company’s receipt of the items listed in Section 2.2(b):
i. such Purchaser’s counterpart signature page of this Agreement, duly countersigned by the Company;
ii. the Note to be issued to such Purchaser at such Closing, duly executed by the Company;
iii. the Warrant to be issued to such Purchaser at such Closing, duly executed by the Company.
3. Legends. All certificates representing the Conversion Shares shall have endorsed thereon the following legend:
(a) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE MORTGAGED, HYPOTHECTED, OR OTHERWISE TRANSFERRED WITIIOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED. OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”
(b) Any legend required to be placed thereon under applicable state securities laws.
| 4. | Purchaser's Representations and Warranties. |
4.1 Purchaser's Individual Representations and Warranties. In connection with his purchase of the Note and the Conversion Shares, the Purchaser hereby represents and warrants to the Company as follows:
(a) Illiquidity. The Purchaser is aware of the illiquidity of the investment and is capable of making an illiquid investment. The Purchaser has adequate means of providing for current economic needs and possible personal contingencies and has no need for liquidity of this investment.
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(b) Accredited Purchaser Statement. Purchaser is an accredited investor (“accredited investor”) as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the 1933 Act, and Purchaser has completed the attached Accredited Purchaser Statement and has completely and correctly answered all the questions therein. Purchaser will provide the Company with such financial and other information concerning me so that the Company may determine whether Purchaser meets applicable investment suitability standards. All such information that Purchaser provides will be complete and accurate.
(c) Financially Experienced. The Purchaser has substantial experience in evaluating and investing in private placement transactions so as to enable the Purchaser to utilize the information made available to the Purchaser in connection with the offering of the Securities to evaluate the merits and risks of an investment in the Company. The Purchaser, by reason of the Purchaser’s own business and financial experience or by reason of the business and financial experience of the Purchaser’s professional advisors who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, has the capacity to protect the Purchaser’s own interests in connection with the purchase of the Securities hereunder.
(d) Authority. The Purchaser represents that (i) the Purchaser is at least twenty-one (21) years of age (if Purchaser is an individual); (ii) the Purchaser was duly formed in accordance with the laws of its jurisdiction of formation and is in good standing in such jurisdiction (if the Purchaser is an entity); and (iii) the Purchaser has full capacity, power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof.
(e) No Broker. No broker or finder has acted for the Purchaser in connection with his, her or its purchase of the Securities and no broker or finder is entitled to any broker’s or finder’s fees or other commissions in connection therewith based on agreements between the Purchaser and any broker or finder.
(f) Investment Intent. The Purchaser is purchasing the Note and the Conversion Shares solely for his own account for investment and not with a view to or for sale in connection with any distribution of the Note or the Conversion Shares or any portion thereof and not with any present intention of selling, offering to sell or otherwise disposing of or distributing the Note, the Conversion Shares, or any portion thereof in any transaction other than a transaction exempt from registration under the 1933 Act. The Purchaser also represents that the entire legal and beneficial interest of the Note and the Conversion Shares is being purchased, and will be held, for the Purchaser's account only, and neither in whole or in part for any other person.
(g) Residence. The Purchaser's principal residence is within the State of _______ and is located at the address indicated beneath the Purchaser's signature below.
(h) Information Concerning the Company. The Purchaser has heretofore discussed the Company and its plans, operations and financial condition with the Company's officers and has heretofore received all such information as the Purchaser has deemed necessary and appropriate to enable the Purchaser to evaluate the financial risk inherent in making an investment in the Note and the Conversion Shares, and the Purchaser has received satisfactory and complete information, and including the receipt of the Company’s business plan with projected financial statements. No person is authorized to give any information or to make any representations in connection with this offering except such information as is contained in the Memorandum. Only information or representations contained in the Memorandum may be relied upon as having been authorized.
(i) Economic Risk. The Purchaser realizes that the purchase of the Note and the Conversion Shares will be a highly speculative investment and involves a high degree of risk, and the Purchaser is able, without impairing his financial condition, to hold the Conversion Shares for an indefinite period of time and to suffer a complete loss on the Purchaser's investment. Purchaser has carefully reviewed the Memorandum, is fully aware of the risks disclosed therein, and makes this investment in the Note and Conversion Shares after fully weighing such risks.
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(j) Restricted Securities. The Purchaser understands and acknowledges that:
(i) The sale of the Note and the Conversion Shares has not been registered under the 1933 Act, and the Note and the Conversion Shares must be held indefinitely unless subsequently registered under the Act or an exemption from such registration is available, and the Company is under no obligation to register the Note or the Conversion Shares;
(ii) the Note and shares certificate representing the Conversion Shares will be stamped with the legends specified in paragraph 2(a) above; and
(iii) the Company will make a notation in its records of the aforementioned restrictions on transfer and legends.
(h) Limitations on Disposition. Without in any way limiting his representations set forth above, the Purchaser further agrees that he shall in no event make any disposition of all or any portion of the Note or the Conversion Shares unless and until:
(i) there is then in effect a registration statement under the 1933 Act covering such proposed disposition and such disposition is made in accordance with said registration statement; or
(ii) (A) the Purchaser shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, (B) the Purchaser shall have furnished the Company with an opinion of the Purchaser's counsel to the effect that such disposition will not require registration of such shares under the 1933 Act, and (C) counsel for the Company shall concur with the opinion of Purchaser’s counsel, and (D) the Company shall have advised the Purchaser of such concurrence; and
(iii) the Purchaser has complied with the rights of first refusal set forth in paragraph 2 hereof.
(i) Valuation of Common Stock. The Purchaser understands that the Stock has been valued by the Board of Directors of the Company, and the Company believes this valuation, which is the basis for determining the number of Conversion Shares into which principal and interest will be converted under the terms of the Note, represents a fair attempt at reaching an accurate appraisal of its worth. The Purchaser understands, however, that the Company can give no assurances that such price is in fact the fair market value of the Stock and that it is possible that, with the benefit of hindsight, the Internal Revenue Service would successfully assert that the value of the common stock on the date of purchase is substantially greater than so determined.
If the Internal Revenue Service were to succeed in a tax determination that the Stock received had value greater than that upon which the transaction was based, the additional value could constitute ordinary income to the Purchaser as of the date of its receipt. The additional taxes (and interest) due would be payable by the Purchaser, and there is no provision for the Company to reimburse the Purchaser for that tax liability, and the Purchaser assumes all responsibility for such potential tax liability.
(j) Short Sale Restriction. Purchaser, Purchaser’s officers, directors, agents, affiliates, parents, or subsidiaries, shall not directly or indirectly enter, or cause to enter, into a short sale of the equity securities of the Borrower.
(k) The representations and warranties contained in this Paragraph are true and complete as of the date hereof and shall survive the execution and delivery of this Agreement or any termination thereof. If any circumstances arise that may cause any such representation or warranty to become false, incomplete or in any way misleading, the Purchaser shall promptly give written notice to the Company specifying therein the affected representation or warranty.
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4.2. Nature of Investment.
(a) Disclosure. The Purchaser has reviewed (i) the Company’s public filings including all Form 10-Ks, Form 10-Qs, and Form 8-Ks, a copy of which is available through the Securities and Exchange Commission; (ii) the Company’s Articles of Incorporation, a copy of which available through the Securities and Exchange Commission; (iii) the Company’s Bylaws, a copy of which available through the Securities and Exchange Commission; (iv) the form of Note; (v) the form of Warrant; and (vi) this Agreement, including, without limitation, the risk factors set forth in the public filings. The Purchaser acknowledges that the Purchaser has been given full access and opportunity to ask questions of management of the Company, and that the Purchaser has in fact taken full advantage, to the Purchaser’s complete satisfaction, of such access and opportunity. The Purchaser believes the Purchaser has received all of the information the Purchaser considers necessary or appropriate for deciding whether to purchase the Securities. The Purchaser further acknowledges that the Company has made available to the Purchaser the opportunity to conduct adequate due diligence of the Company with respect to the activities of the Company, its history, organization, present and proposed operations, prospects and risks, as well as statements made in this Agreement.
(b) No SEC Registration. The Purchaser has been advised and understands that this Offering has not been registered with, or reviewed by, the Securities and Exchange Commission (the “SEC”) because this Offering is intended to be a non-public offering pursuant to Section 4(2) of the Securities Act, and Regulation D promulgated thereunder.
(c) Restrictions on Transfer. The Purchaser understands and agrees that the sale, pledge, hypothecation or transfer (for the purposes of this Agreement, collectively, “transfer”) of any of the Securities, or any part thereof, is subject to the provisions of the Securities Act restricting transfers, unless the Securities or such part thereof are registered under the Securities Act and applicable state securities laws or are exempt from the registration requirements thereof. In addition, the Purchaser understands that this Agreement and the other Transaction Documents impose certain restrictions on the right of the Purchaser to transfer the Securities. Legends (in the form set forth herein) shall be placed on the certificates evidencing the Securities to the effect that they have not been registered under the Securities Act or applicable state securities laws and are subject to certain transfer restrictions and appropriate notations thereof will be made in the Company’s books and records.
(d) Investment Intent. The Purchaser’s investment in the Securities is being made for the Purchaser’s own account, for investment purposes only and not with a view to a distribution or resale to others.
(e) No State Review. The Purchaser understands that no securities administrator of any state has made any finding or determination relating to the fairness of this Offering and that no securities administrator or commission of any state has recommended or endorsed, or will recommend or endorse, the offering of any of the Securities.
4.3. Reliance.
(a) Limited Representations. The Company has made available to Purchaser the opportunity to ask questions of and receive answers from the Company with respect to the activities, prospects, and risks of the Company, as well as the statements made in the public filings and this Agreement. In the Purchaser’s judgment, this Agreement contains all information to the extent material for an understanding of the business of the Company and for the Purchaser to make an investment decision with respect to the Securities. The Purchaser hereby represents that, except as set forth in this Agreement, no representations or warranties have been made to the Purchaser by the Company or any agent, employee or affiliate of the Company and, in entering into the transaction contemplated by this Agreement, the Purchaser is not relying on any information other than the information contained in this Agreement.
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(b) Acknowledgment of Certain Risks. The Purchaser acknowledges that the offer and sale of the Securities is being made by means of and in reliance upon the representations made by the Company in the public filings, projection, or any other document. The Purchaser understands and has independently evaluated the merits and risks of an investment in the Company and the acquisition of the Securities. The Purchaser acknowledges that: (i) THE PURCHASE OF THE SECURITIES IS A SPECULATIVE INVESTMENT AND INVOLVES A HIGH DEGREE OF RISK; (ii) no federal or state agency has made any finding or determination as to the fairness of such investment or any recommendation or endorsement of it; (iii) there is not and will not be in the foreseeable future a market for the sale of the Securities by the Purchaser; (iv) the Company’s ability to execute on its Business Plan may be dependent on the Company’s ability to secure additional financing, and there are no existing arrangements with respect to obtaining such financing; (vi) the Purchaser has read and comprehends the Risk Factors set forth in the public filings and is purchasing the Securities fully cognizant of these risks and is willing to assume these risks.
(c) Reliance On Own Advisors and Own Judgment. The Purchaser has relied solely upon the advice of the Purchaser’s own tax, financial and legal advisors with respect to the tax, financial and legal aspects of this investment, and exclusively on the Purchaser’s own judgment and the judgment of the Purchaser’s advisors as to the merits of the investment.
(d) Entire Agreement. The Purchaser acknowledges and represents that (i) this Agreement and the other Transaction Documents constitute the entire agreement and understanding by and among the parties with respect to the subject matter hereof and thereof and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements between the parties or any prior written agreements between the parties; (ii) there are no other oral or written agreements between the parties with respect to the subject matter hereof and thereof; (iii) the Company is making no statement, representation, warranty or claim to the Purchaser except those set forth in Article 3; and (iv) in making an investment decision, the Purchaser is not relying upon any representation, warranty, statement or claim by the Company or its officers, directors, agents, or advisors except those set forth in Article 3.
4.4. No General Solicitation. The Purchaser acknowledges that no general solicitation or general advertising (including communications published in any newspaper, magazine or other broadcast) has been received by the Purchaser and that no public solicitation or advertisement with respect to the offering of an investment interest in the Company has been made to the Purchaser.
4.5. Requisite Power and Authority. The Purchaser has all necessary power and authority under all applicable provisions of law to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to carry out their provisions. All actions on the Purchaser’s part required for the lawful execution and delivery of this Agreement and the other Transaction Documents to which it is a party have been or will be effectively taken prior to the Closing. Upon their execution and delivery, this Agreement and the Transaction Documents will be valid and binding obligations of the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights, and (b) as limited by general principles of equity that restrict the availability of equitable remedies.
5. Representations and Warranties of the Company. The Company hereby represents and warrants to Purchaser as follows:
(a). The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada. The Company has all requisite corporate power and authority: (a) to own and operate its properties and assets, (b) to execute, deliver and perform this Agreement, the Note, the Warrant, (this Agreement, the Notes, and the Warrants, collectively, the “Transaction Documents”), (c) to issue and sell the Notes and the Warrants and any and all securities issuable upon conversion or exercise of the Notes or the Warrants and the conversion of any such securities (any and all such securities, the “Securities”), (d) to carry out the provisions of this Transaction Documents, and (e) to carry on its business as presently conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.
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(b). The authorized capital stock of the Company consists of five hundred million (500,000,000) shares of common stock, of which seventy-eight million, five hundred seven thousand, eight hundred seventy-nine 78,507,879 are issued and outstanding on a fully diluted basis. All the Shares are validly issued, fully paid, and nonassessable, and such shares have been so issued in full compliance with all federal and state securities laws.
(c) The Company has good and marketable title to all its assets and interests in assets, whether real, personal, mixed, tangible, or intangible, which constitute all the assets and interests in assets that are used in the Company’s business. All these assets are free and clear of restrictions on or conditions to transfer or assignment and free and clear of mortgages, liens, pledges, charges, encumbrances, equities, claims, easements, rights of way, covenants, conditions, or restrictions, except for those disclosed in the Company’s financial statements.
(d) Use of Proceeds. The Company agrees to use the proceeds of this Offering will be used to create and pursue an uplist to a Senior Exchange Listing of the Company or a Spinco, legal and general working capital.
(e) Except as specifically set forth herein, the Company or its directors, agents or officers make no other representations or warranties of any manner or type whatsoever with regard to the Company, whether expressed or implied, and Purchaser is purchasing the Note and the Conversion Shares “As-Is” based solely on its own investigation and at its sole risk.
6. Blue Sky Legends. THE PURCHASER UNDERSTANDS THAT THIS OFFERING HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL OF ANY OF THE STATES IN WHICH THIS OFFERING IS MADE BECAUSE OF THE COMPANY’S REPRESENTATION THAT IT IS INTENDED TO BE A NON-PUBLIC OFFERING PURSUANT TO THE 1933 ACT AND RULE 505 OR 506 PROMULGATED THEREUNDER AND THAT IF ALL THE CONDITIONS OF THE ACT AND RULE 505 OR 506 ARE NOT COMPLIED WITH, THE OFFERING WILL BE RESUBMITTED TO THE ATTORNEY GENERAL FOR AMENDED EXEMPTION. THE INVESTOR UNDERSTANDS THAT WHILE THE OFFERING MEMORANDUM WILL BE FILED WITH THE ATTORNEY GENERAL, THE ATTORNEY GENERAL WILL NOT REVIEW IT PRIOR TO ITS ISSUANCE AND USE. NONE OF THE ATTORNEY GENERALS OF THE ABOVE STATES HAVE PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
| 7. | Miscellaneous. |
(a) Cooperation. The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.
(b) Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to Purchaser at his/her address indicated beneath the Purchaser's signature below, and to the Company at the address of its principal corporate offices (attention: President), or at such other address as such party may designate by ten days' advance written notice to the other party hereto.
(c) Successors and Assigns. Neither party may assign its rights nor delegate its duties under this Agreement.
(d) Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery:
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To Company at the address set forth below.
Odyssey Health, Inc. f/k/a Odyssey Group International, Inc.
2300 West Sahara Avenue Suite 800 - #4012
Las Vegas, Las Vegas 89102
Attn: J. Michael Redmond, Chief Executive Officer
With a copy to:
Joshua D. Brinen, Esq.
Brinen & Associates, LLC
90 Broad Street, Second Floor
New York, New York 10004
Telephone (212) 330-8151
Facsimile (212) 227-0201
www.brinenlaw.com
To Purchaser at the address set forth below.
All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if faxed or emailed.
(e) Counterparts and Facsimile Signatures. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same Agreement. The parties shall be entitled to sign a facsimile copy of this Agreement which shall be binding on the party signing by facsimile. Any party signing by facsimile agrees to promptly execute and deliver to the other parties an original signed Agreement.
(f) Review; Interpretation. Each party to this Agreement has carefully reviewed this Agreement, is familiar with the terms and conditions herein, and was advised by legal counsel of his or its own choice with respect thereto. This Agreement is the product of negotiation among the parties hereto and is not to be interpreted or construed against any party hereto.
(g) Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof.
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(h) Legal Invalidity. If any part or provision of this Agreement is or shall be deemed violative of any applicable laws, rules or regulations, such legal invalidity shall not void the Agreement, or affect the remaining terms and provisions of this Agreement, and the Agreement shall be construed and interpreted to comport with all such laws, rules or regulations to the maximum extent possible.
(i) Amendments. No waiver of any provision of this Agreement or amendment or modification of Agreement shall be effective in any way unless the same is in writing and signed by the party to be charged.
(j) Governing Law. This Agreement and the underlying Note shall be binding upon and inure to the benefit of the Company and the Purchaser and their respective successors and assigns; provided that the Purchaser may not assign this Note, in whole or in part, by operation of law or otherwise. This Agreement and the underlying Note, and any claims arising out of relating to this Agreement and the underlying Note, whether in contract or tort, statutory or common law, shall be governed exclusively by, and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws.
(k) Jurisdiction. THE BORROWER CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS NOTE, OR ANY OTHER INSTRUMENT OR DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH SHALL BE BROUGHT EXCLUSIVELY IN ANY COURT OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE BORROWER, BY THE EXECUTION AND DELIVERY OF THIS NOTE, EXPRESSLY AND IRREVOCABLY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDINGS. THE BORROWER AGREES THAT PERSONAL JURISDICTION OVER IT MAY BE OBTAINED BY THE DELIVERY OF A SUMMONS BY PERSONAL DELIVERY OR OVERNIGHT COURIER AT THE ADDRESS PROVIDED IN SECTION 15 OF THIS NOTE. ASSUMING DELIVERY OF THE SUMMONS IN ACCORDANCE WITH THIS PROVISION, THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON-CONVENIENS OR ANY SIMILAR BASIS.
(l) Final and Entire Agreement; Integration. This Agreement is the final, entire and exclusive agreement between the parties with respect to the subject matter hereof and supersedes any and all prior agreements, negotiations and communications, oral or written. This Agreement may not be modified or amended except by an instrument in writing executed by the parties hereto.
(m) Nonliability. The parties agree that, in the event any party is a corporation or limited liability company, neither the directors, officers, employees, shareholders, members or managers, nor any agents of any such entity shall have any personal liability or obligation hereunder whatsoever, and that each party shall not seek to assert any claim or enforce any of its rights hereunder against such directors, officers, employees, shareholders, members, managers or agents, whether disclosed or undisclosed. This provision is a material consideration for the parties' execution of this Agreement.
(n) Authority. The persons signing this Agreement represent and warrant that they have the authority to bind their principals to this Agreement.
(o) Survival of Representations and Warranties. All of the representations and warranties made herein shall survive the execution and delivery of this Agreement for the maximum time allowable by applicable law.
(p) Waiver. No failure or delay on the part of a party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a party hereto at law, in equity or otherwise. Any waiver of any provision of this Agreement, and any consent to any departure by either party from the terms of any provision of this Agreement, shall be effective (i) only if it is made or given in writing and signed by both parties and (ii) only in the specific instance and for the specific purpose for which made or given.
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(q) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(r) Rules of Construction. Unless the context otherwise requires, references to sections or subsections refer to sections or subsections of this Agreement.
(s) Customer Identification–USA Patriot Act Notice. The Purchaser hereby notifies the Company that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), and the Purchaser’s policies and practices, the Company is required to obtain, verify and record certain information and documentation that identifies the Company, which information includes the name and address of the Seller and such other information that will allow the Purchaser to identify the Company in accordance with the Act. The parties agree to comply with the provision set forth in the Act, in addition to any Requirement of Law regarding the transaction contemplated herein, including without limitation, applicable tax treaties.
(t) Transaction Fees. Each party shall be responsible for its own attorneys’ fees and other costs and expenses associated with documenting and closing the transaction contemplated by this Agreement.
(u) Attorneys’ Fees. In any litigation, arbitration, mediation, or other legal proceeding, in law or in equity to enforce or interpret the terms of this Agreement or any other document contemplated hereby, the Prevailing Party (as defined hereafter) shall be entitled to recover its costs, including any costs of arbitration or mediation, and reasonable attorney’s fees and paralegal fees in addition to any other relief to which such party may be entitled. “Prevailing Party” shall mean the party in any litigation or enforcement action that prevails in the highest number of final rulings, counts or judgments adjudicated by a court of competent jurisdiction.
(w) Waiver of Jury Trial. To the extent permitted by applicable law, each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
(v) Construction and Interpretation.
(i) For purposes of this Agreement, whenever the context requires, the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include the masculine and feminine genders.
(ii) Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any party, whether under any rule of construction or otherwise. No party to this Agreement shall be considered the draftsman. The parties acknowledge and agree that this Agreement has been reviewed, negotiated, and accepted by all parties and their attorneys and shall be construed and interpreted according to the ordinary meaning of the words used so as fairly to accomplish the purposes and intentions of all parties hereto.
(iii) As used in this Agreement, the words ‘‘include’’ and ‘‘including,’’ and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words ‘‘without limitation.’’
(iv) Except as otherwise indicated, all references in this Agreement to ‘‘Articles,’’ ‘‘Sections,’’ ‘‘Schedules’’ and ‘‘Exhibits’’ are intended to refer to an Article or Section of, or Schedule or Exhibit to, this Agreement.
(v) Except as otherwise indicated, all references (i) to any agreement (including this Agreement), contract or Law are to such agreement, contract or Law as amended, modified, supplemented or replaced from time to time, and (ii) to any Governmental Entity include any successor to that Governmental Entity.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
Odyssey Health, Inc. f/k/a Odyssey Group International, Inc.:
By: ______________________
[Signature]
Name: J. Michael Redmond
Title: Chief Executive Officer
Address: 2300 West Sahara Avenue Suite 800 - #4012
Las Vegas, Nevada 89102
Purchaser:
_________________________
[Signature]
Name: ________________
Address: ________________
________________
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EXHIBIT 10.2
THIS SECURED CONVERTIBLE PROMISSORY NOTE AND THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND THIS SECURED CONVERTIBLE NOTE, THE SECURITIES AND ANY INTEREST THEREIN MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS, WHICH, IN THE OPINION OF COUNSEL FOR THE LENDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
CONVERTIBLE PROMISSORY NOTE
| ($_________) | Las Vegas, Nevada |
| August __, 2023 |
FOR VALUE RECEIVED, the undersigned, Odyssey Health, Inc. f/k/a Odyssey Group International, Inc., a Nevada corporation (referred to herein as the "Borrower"), with offices at the address set forth below hereby unconditionally promises to pay to the order of ____________, its endorsees, successors and assigns (the "Lender"), in lawful money of the United States, at such address as the Lender may from time to time designate, the principal sum of _____________thousand dollars ($________) (the "Loan"), this Note shall mature and become due and payable in full on or after the later of twelve (12) months from execution or completion of a Senior Exchange Listing of the Company or a Company Spinout (“Spinco”) of its ONP Technology (the "Maturity Date").
1. Terms of Repayment. Principal of and interest on this Note shall be paid by the Borrower as follows:
(a) On the Maturity Date, Borrower shall pay all principal and interest, unless otherwise converted (as defined in Section 2. Below). Interest shall accrue at a rate of twelve 12%) per annum.
(b) The Borrower further agrees that, if any payment made by the Borrower or any other person is applied to this Note and is at any time annulled, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any property hereafter pledged as security for this Note is required to be returned by Lender to the Borrower, its estate, trustee, receiver or any other party, including, without limitation, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, the Borrower's liability hereunder (and any lien, security interest or other collateral securing such liability) shall be and remain in full force and effect, as fully as if such payment had never been made, or, if prior thereto any such lien, security interest or other collateral hereunder securing the Borrower's liability hereunder shall have been released or terminated by virtue of such cancellation or surrender, this Note (and such lien, security interest or other collateral) shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of the Borrower in respect to the amount of such payment (or any lien, security interest or other collateral securing such obligation).
2. Conversion.
(a) The Lender shall have the option, at any time, to convert the outstanding principal of this Note into fully-paid and non-assessable shares of Spinco’s Common Stock at a price that is seventy percent (70%) of Spinco’s IPO price. In no case shall the conversion price be less than One Hundredth of One Cent ($0.0001). "Fair Market Value" on a date shall be the average of the daily closing prices for the Five (5) consecutive trading days before such date excluding any trades which are not bona fide arm's length transactions. The closing price for each day shall be (a) if such security is listed or admitted for trading on any national securities exchange, the last sale price of such security, regular way, or the mean of the closing bid and asked prices thereof if no such sale occurred, in each case as officially reported on the principal securities exchange on which such security are listed, or (b) if quoted on NASDAQ or any similar system of automated dissemination of quotations of securities prices then in common use the mean between the closing high bid and low asked quotations of such security in the over the counter market as shown by NASDAQ or such similar system of automated dissemination of quotations of securities prices, as reported by any member firm of the New York Stock Exchange selected by the Lender, (c) if not quoted as described in clause (b), the mean between the high bid and low asked quotations for the shares as reported by NASDAQ or any similar successor organization, as reported by any member firm of the New York Stock Exchange selected by the Lender. If such security is quoted on a national securities or central market system in lieu of a market or quotation system described above, the closing price shall be determined in the manner set forth in clause (a) of the preceding sentence if bid and asked quotations are reported but actual transactions are not, and in the manner set forth in clause (b) of the preceding sentence if actual transactions are reported.
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(b) To exercise any conversion, the holder of this Note shall surrender the Note to the Borrower during usual business hours at the offices of the Borrower, accompanied by a written notice in the form attached hereto as Exhibit A, Notice of Conversion, and made a part hereof.
(c) As promptly as practicable after the surrender of this Note by the Lender, the Borrower shall deliver or cause to be delivered to the Lender, certificates for the full number of Shares issuable upon conversion of this Note, in accordance with the provisions hereof, together with a duly executed new Note of the Borrower in the form of this Note for any principal amount not so converted. Such conversion shall be deemed to have been made at the time that this Note was surrendered for conversion and the notice specified herein shall have been received by the Borrower.
(d) The number of shares issuable upon conversion of this Note or repayment by the Borrower in shares shall be proportionately adjusted if the Borrower shall declare a dividend of capital stock on its capital stock, or subdivide its outstanding capital stock into a larger number of shares by reclassification, stock split or otherwise, which adjustment shall be made effective immediately after the record date in the case of a dividend, and immediately after the effective date in the case of a subdivision. The number of shares issuable upon conversion of this Note or any part thereof shall be proportionately adjusted in the amount of securities for which the shares have been changed or exchanged in another transaction for other stock or securities, cash and/or any other property pursuant to a merger, consolidation or other combination. The Borrower shall promptly provide the holder of this Note with notice of any events mandating an adjustment to the conversion ratio, or for any planned merger, consolidation, share exchange or sale of the Borrower, signed by the President and Chief Executive Officer of Borrower.
3. Liability of the Borrower. The Borrower is unconditionally, and without regard to the liability of any other person, liable for the payment and performance of this Note and such liability shall not be affected by an extension of time, renewal, waiver, or modification of this Note or the release, substitution, or addition of collateral for this Note. Each person signing this Note consents to any and all extensions of time, renewals, waivers, or modifications, as well as to release, substitution, or addition of guarantors or collateral security, without affecting the Borrower's liabilities hereunder. Lender is entitled to the benefits of any collateral agreement, guarantee, security agreement, assignment, or any other documents which may be related to or are applicable to the debt evidenced by this Note, all of which are collectively referred to as "Loan Documents" as they now exist, may exist in the future, have existed, and as they may be amended, modified, renewed, or substituted.
4. Representations and Warranties. The Borrower represents and warrants as follows: (i) the Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada; (ii) the execution, delivery and performance by the Borrower of this Note are within the Borrower's powers, have been duly authorized by all necessary action, and do not contravene (A) the Borrower's certificate of incorporation or (B) bylaws or (x) any law or (y) any agreement or document binding on or affecting the Borrower, not otherwise disclosed to the Lender prior to execution of this Note, (iii) no authorization or approval or other action by, and no notice to or filing with, any governmental authority, regulatory body or third person is required for the due execution, delivery and performance by the Borrower of this Note; (iv) this Note constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms except as enforcement hereof may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally and subject to the applicability of general principles of equity; (v) the Borrower has all requisite power and authority to own and operate its property and assets and to conduct its business as now conducted and proposed to be conducted and to consummate the transactions contemplated hereby; (vi) the Borrower is duly qualified to conduct its business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it, or in which the transaction of its business makes such qualification necessary; (vi) there is no pending or, to the Borrower's knowledge, information or belief, threatened action or proceeding affecting the Borrower before any governmental agency or arbitrator which challenges or relates to this Note or which may otherwise have a material adverse effect on the Borrower; (viii) after giving effect to the transactions contemplated by this Note, the Borrower is Solvent; (ix) the Borrower is not in violation or default of any provision of (A) its certificate of incorporation or bylaws, each as currently in effect, or (B) any instrument, judgment, order, writ, decree or contract, statute, rule or regulation to which the Borrower is subject not otherwise disclosed to the Lender prior to the execution of this Note, and (x) this Note is validly issued, free of any taxes, liens, and encumbrances related to the issuance hereof and is not subject to preemptive right or other similar right of members of the Borrower, and (xi) the Borrower has taken all required action to reserve for issuance such number of shares of Common Stock as may be issuable from time to time upon conversion of this Note.
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5. Covenants. So long as any principal or interest is due hereunder and shall remain unpaid, the Borrower will, unless the Lender shall otherwise consent in writing:
(a) Maintain and preserve its existence, rights and privileges;
(b) Give written notice to Lender upon the occurrence of an Event of Default (as defined below) or any event but for the giving of notice or lapse of time, or both, would constitute an Event of Default within Five (5) Business Days of such event;
(c) Not use the proceeds from the issuance of this
Note in any way for any purpose that entails a violation of, or is inconsistent with, Regulation U of the Board of Governors of the Federal
Reserve System of the United States of America;
(d) Comply in all material respects with all applicable laws (whether federal, state or local and whether statutory, administrative or judicial or other) and with every applicable lawful governmental order (whether administrative or judicial);
(e) Not redeem or repurchase any of its capital stock;
(f) Not (i) make any advance or loan to any person, firm or corporation, except for reasonable travel or business expenses advanced to the Company's employees or independent contractors in the ordinary course of business, or (ii) acquire all or substantially all of the assets of another entity;
(g) Not prepay any indebtedness, except for trade payables incurred in the ordinary course of the Borrower's business; and
(h) Not take any action which would impair the rights and privileges of this Note set forth herein or the rights and privileges of the holder of this Note.
6. Events of Default. Each and any of the following shall constitute a default and, after expiration of a grace period, if any, shall constitute an "Event of Default" hereunder:
(a) the nonpayment of principal, late charges or any other costs or expenses promptly when due of any amount payable under this Note;
(b) an Event of Default under this Note (other than a payment default described above), or any other failure of the Borrower to observe or perform any present or future agreement of any nature whatsoever with Lender, including, without limitation, any covenant set forth in this Note;
(c) if Borrower shall commence any case, proceeding or other action: (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, composition or other relief with respect to it or its debts; or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, or the Borrower shall make a general assignment for the benefit of its creditors; or (iii) there shall be commenced against the Borrower any case, proceeding or other action of a nature referred to above or seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property, which case, proceeding or other action results in the entry of any order for relief or remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) the Borrower shall take any action indicating its consent to, approval of, or acquiescence in, or in furtherance of, any of the acts set forth; or (iv) the Borrower shall generally not, or shall be unable to, pay its debts as they become due or shall admit in writing its inability to pay its debts;
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(d) any representation or warranty made by the Borrower or any other person or entity under this Note or under any other Transaction Documents shall prove to have been incorrect in any material respect when made;
(e) an event of default or default shall occur and be continuing under any other material agreement, document or instrument binding upon the Borrower including, without limitation, any instrument for borrowed money in excess of one hundred thousand dollars ($100,000) (whether or not any such event of default or default is waived by the holder thereof) and including, without limitation, under any other Transaction Document;
(f) the entry of any judgment against Borrower or any of its property for an amount in excess of one hundred thousand dollars ($100,000) that remains unsatisfied for thirty (30) days;
(g) the sale of all or substantially all of the assets, or change in ownership or the dissolution, liquidation, merger, consolidation, or reorganization of Borrower without the Lender's prior written consent; or
(h) the Borrower's shares of Common Stock are suspended from trading or delisted from trading on the Over the Counter Bulletin Board.
7. Lender's Rights Upon Default. Upon the occurrence of any Event of Default, the Lender may, at its sole and exclusive option, do any or all of the following, either concurrently or separately: (a) accelerate the maturity of this Note and demand immediate payment in full, whereupon the outstanding principal amount of the Note and all obligations of Borrower to Lender, together with accrued interest thereon and accrued charges and costs, shall become immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived; and (b) exercise all legally available rights and privileges.
8. Default Interest Rate. Upon an Event of Default, without any further action on the Part of Lender, interest will thereafter accrue at the rate equal to the lesser of (i) 15% per annum or (ii) the highest rate permitted by applicable law, per annum (the Default Rate"), until all outstanding principal, interest and fees are repaid in full by Borrower.
9. Default Contingency. If the Note is not repaid by the Maturity Date:
(1) Principal Amount of the Note will be automatically increased by an additional ten percent (10%).
(2) The Lender shall receive Borrower’s common stock equal to One Hundred Thousand Dollars ($100,000.00) valued at the price of the Borrower’s Common Stock at the Maturity Date; and
(3) The Lender shall receive a warrant to purchase One Hundred Thousand (100,000) shares of Borrower’s common stock at an exercise price of six cents ($0.06).
10. Usury. In no event shall the amount of interest paid or agreed to be paid hereunder exceed the highest lawful rate permissible under applicable law. Any excess amount of deemed interest shall be null and void and shall not interfere with or affect the Borrower's obligation to repay the principal of and interest on the Note. This confirms that the Borrower and, by its acceptance of this Note, the Lender intend to contract in strict compliance with applicable usury laws from time to time in effect. Accordingly, the Borrower and the Lender stipulate and agree that none of the terms and provisions contained herein shall ever be construed to create a contract to pay, for the use or forbearance of money, interest in excess of the maximum amount of interest permitted to be charged by applicable law from time to time in effect.
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11. Prepayment. This Note may he prepaid in whole or in part, at any time, without the prior written consent of the Lender.
12. Costs of Enforcement. Borrower hereby covenants and agrees to indemnify, defend and hold Lender harmless from and against all costs and expenses, including reasonable attorneys' fees and their costs, together with interest thereon at the Prime Rate, incurred by Lender in enforcing its rights under this Note; or if Lender is made a party as a defendant in any action or proceeding arising out of or in connection with its status as a lender, or if Lender is requested to respond to any subpoena or other legal process issued in connection with this Note; or reasonable disbursements arising out of any costs and expenses, including reasonable attorneys' fees and their costs incurred in any bankruptcy case; or for any legal or appraisal reviews, advice or counsel performed for Lender following a request by Borrower for waiver, modification or amendment of this Note or any of the other Loan Documents.
13. Governing Law. This Note shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns; provided that the Borrower may not assign this Note, in whole or in part, by operation of law or otherwise, without the prior written consent of the Lender. The Lender may assign or otherwise participate out all or part of, or any interest in, its rights and benefits hereunder and to the extent of such assignment or participation such assignee shall have the same rights and benefits against the Borrower as it would have had if it were the Lender. This Note, and any claims arising out of relating to this Note, whether in contract or tort, statutory or common law, shall be governed exclusively by, and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws.
14. Jurisdiction. THE BORROWER CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS NOTE, OR ANY OTHER INSTRUMENT OR DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH SHALL BE BROUGHT EXCLUSIVELY IN ANY COURT OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE BORROWER, BY THE EXECUTION AND DELIVERY OF THIS NOTE, EXPRESSLY AND IRREVOCABLY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDINGS. THE BORROWER AGREES THAT PERSONAL JURISDICTION OVER IT MAY BE OBTAINED BY THE DELIVERY OF A SUMMONS BY PERSONAL DELIVERY OR OVERNIGHT COURIER AT THE ADDRESS PROVIDED IN SECTION 15 OF THIS NOTE. ASSUMING DELIVERY OF THE SUMMONS IN ACCORDANCE WITH THIS PROVISION, THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON-CONVENIENS OR ANY SIMILAR BASIS.
15. Miscellaneous. (a) Borrower hereby waives protest, notice of protest, presentment, dishonor, and demand. (b) Time is of the essence for each of Borrower's covenants under this Note. (c) The rights and privileges of Lender under this Note shall inure to the benefit of its successors and assigns. All obligations of Borrower in connection with this Note shall bind Borrower's successors and assigns, and Lender's conversion rights shall succeed to any successor securities to Borrower's Common Stock. (d) If any provision of this Note shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Note shall be construed as if such invalid or unenforceable provision had never been contained herein. (e) The waiver of any Event of Default or the failure of Lender to exercise any right or remedy to which it may be entitled shall not be deemed a waiver of any subsequent Event of Default or Lender's right to exercise that or any other right or remedy to which Lender is entitled. No delay or omission by Lender in exercising, or failure by Lender to exercise on any one or more occasions, shall be construed as a waiver or novation of this Note or prevent the subsequent exercise of any or all such rights. (f) This Note may not be waived, changed, modified, or discharged orally, but only in writing.
16. Notice, Etc. Any notice required by the provisions of this Note will be in writing and will be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient; if not, then on the next business day; (c) Five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, and delivered as follows to each party, at such other address as shall be designated by such party in a written notice to the other parties.
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17. Definitions. As used herein, the term "Solvent" shall mean, with respect to any person or entity on a particular date, that on such date (i) the fair value of the property of such person or entity is not less than the total amount of the liabilities of such person or entity, (ii) the present fair salable value of the assets of such person or entity is not less than the amount required to pay the probable liability on such person's existing debts as they become absolute and matured, (iii) such person or entity is able to realize upon its assets and pay its debts and other liabilities, (iv) such person or entity does not intend to, and does not believe that it will, incur debts or liabilities beyond such person or entity's ability to pay as such debts and liabilities mature and (v) such person or entity is not engaged in business or a transaction, and is not about to engage in a business or a transaction, for which such person's or entity's property would constitute unreasonably small capital. As used herein, the term "Securities Purchase Agreement," shall mean the Securities Purchase Agreement dated the date hereof among the Borrower, the Lender and the other purchasers identified therein.
18. Tag-Along Registration Rights. In the event that the Company intends to register any of its securities under the Securities Act of 1933, as amended (the "Act"), it shall promptly give written notice to the Holder of its intention to do so. The Holder shall be entitled to include in such registration all or a portion of the registrable securities held by the Holder. The Company shall use its best efforts to include in such registration all registrable securities specified in such notice. The Holder agrees to furnish such information regarding itself, the registrable securities held by it, and the intended method of disposition of such securities as shall be reasonably requested by the Company to effect the registration of such Holder's registrable securities. Notwithstanding the foregoing, this section shall be waived if required by the underwriter. A lockup or leak out will also be signed by the Lender as required by the underwriter.
19. Right of Participation. The Lender shall have the right to participate in any future offering by the Company for so long as any portion of the Note remains outstanding, for an aggregate amount equal to fifteen (15%) of such future offering, unless prohibited by an underwriting agreement between the Borrower and an underwriter as a part of a secondary offering. The Borrower will notify Lender of such an offering, and Lender shall respond with a firm commitment within ten (10) business days of notice.
IN WITNESS WHEREOF, the undersigned has executed this Secured Convertible Promissory Note as of the date first set forth above.
|
Odyssey Health, Inc. f/k/a Odyssey Group International, Inc. | |
| By: _______________________________ | |
| Name: J. Michael Redmond | |
| Title: Chief Executive Officer |
| 6 |
EXHIBIT A
NOTICE OF CONVERSION
(to be signed upon conversion of the Note)
TO ___________:
The undersigned, the holder of the foregoing Note, hereby surrenders such Note for conversion into shares of Common Stock of Odyssey Health, Inc. f/k/a Odyssey Group International, Inc., and requests that the certificates for such shares be issued in the name of ____________________, and delivered to, _______________________, whose address is _________________________________
Dated: _______________
__________________________
(signature)
__________________________
__________________________
__________________________
(address)
| 7 |
EXHIBIT 10.3
NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
SPINCO
Warrant Shares: XXX
Date of Issuance: _________ (“Issuance Date”)
This COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received in connection with the execution of that certain Note dated as of the Issuance Date the Note (as defined below), [HOLDER] (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of issuance hereof, to purchase from SPINCO, a Nevada corporation (the “Company”), NUMBER OF SHARES (XXX) shares of Common Stock (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by the Company as of the date hereof pursuant to the promissory note in the principal amount of FACE AMOUNT ($YYYY) issued to the Holder by the Company on DATE (the “Note”).
Capitalized terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of this Warrant or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean STRIKE PRICE ($Z.ZZZ), subject to adjustment as provided herein (including but not limited to cashless exercise), and the term “Exercise Period” shall mean the period commencing on the Issuance Date and ending on 5:00 p.m. eastern standard time on the five-year anniversary thereof.
| 1. | EXERCISE OF WARRANT. |
(a) Mechanics of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or before the second Trading Day (the “Warrant Share Delivery Date”) following the date on which the Holder sent the Exercise Notice to the Company or the Company’s transfer agent, and upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise Price” and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire transfer of immediately available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise Price provided), the Company shall (or direct its transfer agent to) issue and deliver by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format if requested by the Holder). Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three business days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.
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If the Company fails to cause its transfer agent to issue to the Holder the respective shares of Common Stock by the respective Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion in addition to all other rights and remedies at law, under this Warrant, or otherwise, and such failure shall also be deemed an event of default under the Note, a material breach under this Warrant, and a material breach under the Purchase Agreement.
(b) No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction.
(c) Holder’s Exercise Limitations. Notwithstanding anything to the contrary contained herein, the Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise Notice, the Holder (together with the Holder’s affiliates (the “Affiliates”), and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 1(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 1(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation hereunder. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
(d) Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Company’s transfer agent to transmit to the Holder the Warrant Shares in accordance with the provisions of this Warrant (including but not limited to Section 1(a) above pursuant to an exercise on or before the respective Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder, within one (1) business day of Holder’s request, the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the product of (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder within one (1) business day of Holder’s request the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases, or effectuates a cashless exercise hereunder for, Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
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2. ADJUSTMENTS. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
(a) Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:
(i) any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date; and
(ii) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i); provided, however, that in the event that the Distribution is of shares of common stock of a company (other than the Company) whose common stock is traded on a national securities exchange or a national automated quotation system (“Other Shares of Common Stock”), then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i) and the number of Warrant Shares calculated in accordance with the first part of this clause (ii).
(b) Anti-Dilution Adjustments to Exercise Price. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or securities (including but not limited to Common Stock Equivalents) entitling any person or entity (for purposes of clarification, including but not limited to the Holder pursuant to (i) any other security of the Company currently held by Holder, (ii) any other security of the Company issued to Holder on or after the Issuance Date (including but not limited to the Note), or (iii) any other agreement entered into between the Company and Holder) to acquire shares of Common Stock (upon conversion, exercise or otherwise), at an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, elimination of an applicable floor price for any reason in the future (including but not limited to the passage of time or satisfaction of certain condition(s)), reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled or potentially entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise Price at any time while such Common Stock or Common Stock Equivalents are in existence, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance (regardless of whether the Common Stock or Common Stock Equivalents are (i) subsequently redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted or exercised at such Base Share Price), then the Exercise Price shall be reduced at the option of the Holder and only reduced to equal the Base Share Price, and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price prior to such adjustment (for the avoidance of doubt, the aggregate Exercise Price prior to such adjustment is calculated as follows: the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation) multiplied by the Exercise Price in effect immediately prior to such adjustment). By way of example, if E is the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation), F is the Exercise Price in effect immediately prior to such adjustment, and G is the Base Share Price, the adjustment to the number of Warrant Shares can be expressed in the following formula: Total number of Warrant Shares after such Dilutive Issuance = the number obtained from dividing [E x F] by G. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued, regardless of whether the Common Stock or Common Stock Equivalents are (i) subsequently redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted or exercised at such Base Share Price by the holder thereof (for the avoidance of doubt, the Holder may utilize the Base Share Price even if the Company did not actually issue shares of its common stock at the Base Share Price under the respective Common stock Equivalents). The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 2(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of clarification, regardless of whether (i) the Company provides a Dilutive Issuance Notice pursuant to this Section 2(b) upon the occurrence of any Dilutive Issuance or (ii) the Holder accurately refers to the number of Warrant Shares or Base Share Price in the Exercise Notice, the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price as well as the Base Share Price at all times on and after the date of such Dilutive Issuance.
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(c) Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the date the subdivision or combination becomes effective. Each such adjustment of the Exercise Price shall be calculated to the nearest one-hundredth of a cent. Such adjustment shall be made successively whenever any event covered by this Section 2(c) shall occur.
3. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with or into another entity and the Company is not the surviving entity (such surviving entity, the “Successor Entity”), (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or by another individual or entity, and approved by the Company) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares of Common Stock for other securities, cash or property and the holders of at least 50% of the Common Stock accept such offer, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock) (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the number of shares of Common Stock of the Successor Entity or of the Company and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event (disregarding any limitation on exercise contained herein solely for the purpose of such determination). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any Successor Entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.
4. NON-CIRCUMVENTION. The Company covenants and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive rights, three (3) times the number of shares of Common Stock into which the Warrants are then exercisable into to provide for the exercise of the rights represented by this Warrant (without regard to any limitations on exercise).
5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
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| 6. | REISSUANCE. |
(a) Lost, Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
(b) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date.
7. TRANSFER. This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall be null and void if the Company does not obtain the prior signed written consent of the Holder). This Warrant or any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in whole or in part, without the need to obtain the Company’s consent thereto.
8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to the holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.
9. AMENDMENT AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Holder.
10. GOVERNING LAW AND VENUE. This Warrant shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts located in the State of Nevada or federal courts located in the State of Nevada. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT ENTERED INTO IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Warrant or any other transaction document entered into in connection with this Warrant by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under the Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
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11. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.
12. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
| (a) | [Intentionally Omitted]. |
(b) “Closing Sale Price” means, for any security as of any date, (i) the last closing trade price for such security on the Principal Market, as reported by Quotestream or other similar quotation service provider designated by the Holder, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Quotestream or other similar quotation service provider designated by the Holder, or (ii) if the foregoing does not apply, the last trade price of such security in the over-the-counter market for such security as reported by Quotestream or other similar quotation service provider designated by the Holder, or (iii) if no last trade price is reported for such security by Quotestream or other similar quotation service provider designated by the Holder, the average of the bid and ask prices of any market makers for such security as reported by Quotestream or other similar quotation service provider designated by the Holder. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.
(c) “Common Stock” means the Company’s common stock, par value $0.001, and any other class of securities into which such securities may hereafter be reclassified or changed.
(d) “Common Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(e) “Person” and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency thereof.
(f) “Principal Market” means the principal securities exchange or trading market where such Common Stock is listed or quoted, including but not limited to any tier of the OTC Markets, any tier of the NASDAQ Stock Market (including NASDAQ Capital Market), or the NYSE American, or any successor to such markets.
(g) “Market Price” means the highest traded price of the Common Stock during the one hundred and fifty Trading Days prior to the date of the respective Exercise Notice.
(h) ed on its Principal Market, provided, however, that if the Common Stock is not then listed or quoted on any Principal Market, then any calendar day.
13. Tag-Along Registration Rights. In the event that the Company intends to register any of its securities under the Securities Act of 1933, as amended (the "Act"), it shall promptly give written notice to the Holder of its intention to do so. The Holder shall be entitled to include in such registration all or a portion of the registrable securities held by the Holder. The Company shall use its best efforts to include in such registration all registrable securities specified in such notice. The Holder agrees to furnish such information regarding itself, the registrable securities held by it, and the intended method of disposition of such securities as shall be reasonably requested by the Company to effect the registration of such Holder's registrable securities.
* * * * * * *
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set forth above.
|
SPINCO | |
| ___________________________ | |
| Name: J. Michael Redmond | |
| Title: Chief Executive Officer |
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EXHIBIT A
EXERCISE NOTICE
(To be executed by the registered holder to exercise this Common Stock Purchase Warrant)
THE UNDERSIGNED holder hereby exercises the right to purchase of the shares of Common Stock (“Warrant Shares”) of SPINCO, a Nevada corporation (the “Company”), evidenced by the attached copy of the Common Stock Purchase Warrant (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
| 1. | Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as (check one): |
| ☐ | a cash exercise with respect to __________________ Warrant Shares; |
| 2. | Payment of Exercise Price. If cash exercise is selected above, the holder shall pay the applicable Aggregate Exercise Price in the sum of $ __________________ to the Company in accordance with the terms of the Warrant. |
| 3. | Delivery of Warrant Shares. The Company shall deliver to the holder ___________________ Warrant Shares in accordance with the terms of the Warrant. |
Date: __________________
| (Print Name of Registered Holder) | |
| By: ________________________________________________ | |
| Name: ______________________________________________ | |
| Title: _______________________________________________ |
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EXHIBIT B
ASSIGNMENT OF WARRANT
(To be signed only upon authorized transfer of the Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto ____________________________ the right to purchase ________________ shares of common stock of SPINCO, to which the within Common Stock Purchase Warrant relates and appoints ________________, as attorney-in-fact, to transfer said right on the books of SPINCO with full power of substitution and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.
| Dated: _____________________________________ | |
| (Signature) * | |
| (Name) | |
| (Address) | |
| (Social Security or Tax Identification No.) |
* The signature on this Assignment of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.
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